greater. lot of changes coming down the pike. we will translate as much as we can for you. as we figure out it out we will bring it to you. >> dr. gupta will have more on this election as the dust settles this weekend on sanjay gupta md. a look at the future of medical marijuana, the right to die battles and soda taxes. that and more this saturday at 4:30 p.m. eastern and sunday 7:30 in the morning. cnn newsroom continues with brooke baldwin. >> i'm brooke baldwin. happy friday. here we go. our nation is speeding to toward steep tax hikes and budget cuts known as the fiscal cliff. now the election is over, it's time for washington to get in gear. do something about it. this fiscal cliff business could affect just about every single one of us, and you can bet there's plenty going on behind the scenes. this past hour we heard from the president in the east room of the white house basically announcing he's inviting leaders from both houses of congress and from both political parties to meet with him at the white house

next friday. just a couple of minutes ago, we heard the president say he's open to compromise and open to new ideas, but there's one point the president is sticking to -- higher taxes for people making higher incomes. take a listen. >> i refuse to accept any approach that isn't balanced. i'm not going to ask students and seniors and middle-class families to pay down the entire deficit while people like me, making over $250,000 aren't a asked to pay a dime more in taxes. >> two hours before we saw the president, we saw the house speaker, republican, john boehner, said quote, everything on the revenue side and on the sp spending side has to be looked at but when it comes to specifics he put the ball firmly in barack obama's court. >> i don't want to box myself in or anyone else in. i think it is important for us to come to an dpe agreement with

the president but this is his opportunity to lead. >> here to sort what call of this must mean, we have all angles covered, including from the white house ahead of this daily briefing. we have jessica yellin, athena jones and ali velshi in new york. let me begin with you. we were watching the president walk in the east room. i noticed standing ovation. the energy in the room. the president pulled out his own pen saying yes, i'm ready to sign the bill flanked by marylandle class americans. when it comes to middle-clax tax cuts it sounds like the president is sticking to his guns. >> his terms are fairly stark. he's willing to negotiate on entitlements, medicare, medicaid. the white house democrats consider that a huge give the democratic party but what he is not willing to negotiate on is raising taxes on the wealthiest americans and that's where the battle lines will be drawn. congressional republicans have

made it clear that is where they draw the line. they do not want to see a change in tax rates. now the white house, if you would ask them, they would say that their position has been bolstered by the election because the president ran on this. and the american people voted for it when they voted him in to office. arguably he has a significant bit of leverage here. neither side wants to go over the fiscal cliff. that would be with a sequester, not necessarily with the tax cuts, but it is rolled in to one. both sides would prefer compromise, brooke. >> the president said i'm not wedded to every detail of my plan. i'm open to compromise. your reporting that we learned and heard from the president saying he is inviting both member parties to come to the white house next week. any idea what to expect there? >> any idea, sorry, what they will be discuss something. >> just what to expect out of that meeting. >> out of that. i think what they are trying to do is lay out where each side stands, what their absolutes are

and see where they can move from there. each side, you know, wants to see, after the election, okay, there is a lot of discussion on the trail that was very public. some of that might be rhetoric. behind closed doors, what are they willing to give on? and then the president, the day after that, will have to fly to asia for a trip, overseas trips and then there's thanksgiving. so there's not a lot of time to get things done. they have to start the ball rolling. they will have that one big meeting with the leadership but you can expect their avides to o a lot of negotiating. >> 52 days to go. jessica yellin, chief white house correspondent. thank you. now to the other side of the fiscal cliff. this is what john boehner had to say. >> when the president and i have been able to come to an agreement there's been no problem in getting it passed here in the house. >> athena jones on the hill for

us today with this part of the story. speaker boehner, he talked about what would happen if we went over the fiscal cliff, the need for tax code reform. what was the biggest take away from his message? >> it is interesting. we heard from speaker boehner today and saw him in an interview last night and on wednesday. his tone has been conciliatory but it is interesting because he's dig thing in and stuck to his guns on this issue of taxes. we heard him to say everything on the revenue side and spending side has to be looked at, which sounds like an opening but he is continuing to insist in the speech today, as well, that revenue can't come from raising tax rates on wealthier americans. he talked about closing loopholes and getting rid of the deductions. that could end up with some people paying more in taxes but he doesn't want to see anything happening to those lowered tack rates, the tax rates lowered under bush. >> talking about reforming the tax code.

let's play the clip. >> we also know that if we clean up the code and make it simpler, the tax code will be more efficient. the current code only collects 85% of what's due to government. it's clear if you have a simpler, cleaner, fairer tax code that efficiency effectiveness and efficiency of the tax code increases exponentially. >> as i said, 52 days of the session, does he expect to clean up the tax code in that amount of time? >> no. he is not expecting to get that done. he is not expecting to get a lot done in a lame duck session. he has talked about wanting to come together to put office call cliff and sequestration and lay the ground work for them to do the big work next year. he said 2013 is when they will come together and tackle the big

issues but declined to say what the framework should look like. we know the house passed a bill to eck tend the current tax rates and the he wants to extend it for the middle class. but no one wants to be fied down here on this. we will have to see whether this common ground everyone says they are looking for is really a real place or a fantasy land. >> athena jones, thank you. ali velshi. i have to bring you in here. help us understand this. speaker boehner is saying no to raising tax rates. yes on the table to raising tax revenue. explain what's the difference and, as an american, how does it affect me? >> this will be the biggest question. raising tax rates is a percentage you pay. he is saying nobody should pay a higher percentage. if you are paying the top end you shouldn't pay the 39% president obama wants you to pay. raising tax revenues is the pool of money the government

collects. say more people start to work. you have 1 is 0% more people working. they can pay a lower percentage of their income as taxes, but the government would end up with more money. or let's say you took out deductions. people have the same income tax rate but you don't get deductions for things. it is a bit of a smoke screen partially because the republicans are depending on extra revenue from an increase in economic growth, which nobody really sees getting that high. that's the -- it's a bit of a smoke screen. >> on the raising tax rates part of it when i was listening to the speaker and taking notes he mentioned two times, really warning that small business jobs would be destroyed if we raise the taxes on the wealthiest americans. he kept citing this report by this huge accounting firm, ernst & young that says employment in the long run would fall by .5%, roughly 710,000 fewer jobs in today's economy. can you put that number in perspective? 700,000 fewer jobs.

>> i can put the report in perspective. it was turn ired by independent businesses that don't want to see their tax rate increased. it is counter to all other studies that i have seen on this thing. that report got in to my inbox and got deleted. >> okay. thank you for your honesty. >> doesn't make sense. it doesn't make any sense at all. >> you hear the number but thank you. that is what i was trying to get at. we heard president obama say if congress fails to come up with a deal by the end of the year, everyone's taxes will be going up. it would be bad for the economy. i was reading new york times this morning op-ed piece that said it may not be a bad thing if we drive over the fiscal cliff. it is worth points out the fiscal cliff isn't really a cliff. it's not like the debt ceiling confrontation where terrible things might with well have happened right away if the deadline had been missed. he goes on, this time nothing very bad will happen to the economy if the grooimt agreement isn't reached until a few weeks

or few months in to 2013. so there is time to bargain. is that a crazy thought? >> it goes further to say that president obama stand your ground. don't compromise and don't give in. >> don't be held hostage. he said. >> remarkable. paul krugman is a noble prize winner, a smart guy. i don't know where he is getting this from. it's the opposite of compromise. the reason we are in this mess is because nobody will compromise. generally speaking it has been conservative republicans, the tea party and people who signed the pledge to nordquist not increase taxes. this is the domain of the right until now. i think he is trying to vane the seesaw by coming out with unequally unreasonable things to the left. he's wrong. absolutely wrong that nothing will happen. all you will see -- this is the dangs you park. you are getting disinformation from everyone. ernst & young has to be careful. they are a reputable accounting firm putting their name on this

as if it was general research. it was commissioned by a partisan source on this. everyone has it. and we will work on this. you and me and cnn will make sure everyone has the facts because this is not facts. it is all distortion. >> little extra spicy today. >> little spicy. >> thank you so much. now we have to talk about this horrible story many days later here. long lines, short tempers for people hit so hard, first by the hurricane and now the snowstorm. >> we're angry and we're not taking it anymore. >> we're going to take you live to new york where hundreds of thousands of people still don't have power. now they are dealing with gas rationing. also, obama care. the president's health care plan is the law of the land. but are states ready to implement it? dr. sanjay gupta will help us explain that coming up. in america today we're running out of a vital resource we need

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want to take a live look at lady liberty. beautiful skies over new york. we are showing you the statue of liberty because in the last couple of days lady liberty has not been lit because like so many in the northeast that have been out of power. many of you still are. we are told that this afternoon for the first time since the horrendous superstorm hit you in the northeast area, the statue of liberty will be relit this afternoon. speaking of that part of the world here, tempers flaring in new york after another cold night without power. >> restore the power to our community now! now! [ applause ] >> we're done! >> right now. >> done she says.

this was ocean side, new york, just a couple of hours ago. look at the crowds. people there obviously angry. who are they angry at? the utility company known as lipa. as of today, more than 200,000 are without power in this one community. folks, that's 12 days since the superstorm swept through here. 12 days without heat with temperatures last night dipping in the 30s. lack of power, not confined to long island. listen as new york governor andrew cuomo blasts utility companies across the region. >> you pay a person for a service. they were specialized in doing this and we paid them and we gave them a franchise because they represented themselves as experts at doing this. and they failed. and they should be held accountable for their failure. >> also consider this, today new jersey's attorney general announced lawsuits against eight businesses accused of post-sandy

gouging. that may be just the beginning. very angry new jersey consumers have already filed more than 1200 complaints against gas stations and hardware stores an hotels. and just getting some news here in my ear about the president. the president now we are learning will be going to new york to tour the storm-ravaged region in new york. the president there. he was there touring when chris christie after sandy and post nor'easter. in terms of the gas shortages that have people lining up hour upon hour, new york city began this odd/even gas rationing this morning. new jersey started it last week. rationing programs are set to begin on long island in the next couple of hours, but there's already been a hitch. you see, even with the rationing, stations are running out of gas. roger clark, i want to bring you in. you are a reporter with our cnn

affiliate new york one. how long are the lines and how mad are these people? >> reporter: pretty mad. no doubt about it. we are on mcginness boulevard and green point avenue. a major thorough fare here. one way is to the brooklyn queens expressway and the midtown tunnel to get to manhattan. a lot of gas stations but not a lot open. the one we are standing at which is a hess station, it started at 6:00 and it is going well. the nypd was here bringing in only cars that had odd numbers or letters on their last number of their license plate. everything was going great until 11:00 when they ran out of gas. so then wa we found is a lot of folks came here and went across the street and they are in another line to go two blocks that way to a sunoco. >> they are hopping gas station to gas station. ultimately you could run out of

gas. what's plan b for these folks? >> well, that's a good question. a lot of people who we talked with said they haven't been to work for days because they don't have any gas and can't get to work. >> wow. >> they can't get to the gas station and don't want to wait on-line because they are going to run out. that's what happened. the people who were at the final point probably had been in line for 45 minutes to an hour and then were told sorry, we're out. and now they are waiting in another line to go to another station and who knows how long it will last there. >> unreal. roger clark with new york 1, thank you for joining us live to help put this in perspective. a lot of you want to help the folks in new jersey and new york areas. you can. go to cnn.com/impact. just click around and you will find information on how you can help in that relief effort. have you heard about this? this man with an ak-47 walks in a credit union and says don't

move or i will shoot you. we have surveillance video of him. take a good long look at what they are calling the ak-47 bandit. now there is a nationwide manhunt for this guy. we will talk about his latest heist ahead. me the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

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a man armed with an ak-47 walks in to this idaho credit union, orders everyone to stop and freeze. then it goes on to clean out the teller drawers and orders the manager to do the same with the vault. now a nationwide shunt underway for this man nicknamed the ak-47 bandit by the fbi. he hit the east idaho credit union this past wednesday. this is video, surveillance video from july. this is not his first time doing this. the fbi says he's robbed at least three other banks this year. two in california, one in washington state. he allegedly shot and seriously wounded a police officer who spotted him running out of there after that robbery number one. in judging from an eyewitness account many the rexburg standard journal, the robbery could have gotten uglier. the suspect became agitated when it took too long to get the

money out of the vault. he told the victims about shooting the police officer and ordered everyone in the vault, slammed the door and he ran off. $70,000 in reward are offered up for this guy, this ak-47 bandit described as 25 to 40 years old. 5'10" and stocky. if you recognize him, call police, call fbi. the family court judge in texas caught on videotape beating his teenager daughter with a belt has been reinstated to the bench. he is william adams. he was suspended a year ago, with pay, after that video rant went viral -- not a rant. it was a video that went viral on you tube showing him abusing his 16-year-old daughter. this was back in 2004. this happened in the small gulf coast town called rockport. we want to warn you here, this is a video, a little bit of it recorded by his daughter. it is graphic and disturbing. >> bend over the bed.

>> bend over the bed. i'm going to keep hitting you on your legs. bend over the bed. >> again the daughter is the one who had the camera and was recording. the texas supreme court reinstated adams but he will no longer preside over child abuse skass. this county prosecutor said too much time had passed to file formal charge. his pay was cut from 150,000 a year to 144,000. he is up for re-election in 2012. the family of a florida a.m. university drum major who died after the hazing ritual has rejected a settlement offer. attorney for robert champion's family says the unit's $300,000 offer is an insult. the family sued the university in july. you know the story, champion died a year ago after beaten on a bus after a football game. health care reform is kicking in. the question is how will it affect you? we're digging deeper today on

when parts of the plan go in to effect. ♪ . ralph sacrificed more than his service to his country, he sacrificed his blood. ♪ >> my dad, ralph w. bingham was a veteran of the first world war, the big war. >> for that sacrifice, he was awarded our nation's oldest medal, the purple heart. >> he lost his right leg fighting in france and he received a purple heart for that. we had it for many years in my home where i grew up. >> unby knownst to us was lost in some manner in one of his moves later in his life.

>> i found private ral ra ralph's medal. and some i have located for family and some i haven't. i don't consider it a hobby. it is a calling and honor. a lot of times they put it in a shoe box and it is misplaced and they lose it. ♪ i myself have a purple heart. it hangs on the wall in my mother's home and i would hope one day if my medal was lost someone would do the same thing for me and my family. it is truly an honor to bring private bingham's purple heart home to his family. it is a great honor to bring home his purple heart. thank you very much. >> the medal means a lot to me and our family. >> so that's it. that's the purple heart. >> there it is. i remember seeing it as a girl

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it hasn't been harmonious four years between house speaker boehner and president obama. now they can give bipartisanship another chance. are house republicans trying to repeal the health care act? this is what speaker boehner told us. >> i think the election changes that. it is clear the president was re-elected. obama care is the law of the land. >> you won't spend time next year trying to repeal it? >> there may be parts that we believe need to be changed we

may do that. no decisions at this point. >> what can you expect from the new law of the land, the health care law? some parts have kicked in. other parts won't take effect until 2014. cnn's chief medical correspondent dr. sanjay goup ta has more on what you need to know. >> as a starting point, try to think of this almost in some ways more as insurance reform rather than health care reform. as you look at the list here, think of these things and the regulations on insurance companies and how they benefit patients. for example you can't be charged higher premiums for being sick. that's a big one. can't be denied coverage due to pre-existing conditions and no annual dollar limits on health benefits. brooke, we're used to talking about people who could not buy health insurance because they had a pre-existing condition. this will help them. also people who are sick and as a result of being sick had to pay a lot of money in premiums to get health care insurance.

this will offer them relief, as well. one of the strategies that a lot of states are adopting is known as health insurance exchanges. think of that as a one-stop sort of marketplace where insurance companies are essentially bidding for your business. more competition may lower prices. more importantly, it offers an option for people who have not had health insurance, are doing it on their own, maybe working for a small business. go to one stop shop and get your insurance there. 16 states said they are going to do this. and three said they intend to do it. and a lot of states are in the air and they have to decide and if they don't create one the federal government comes in and does it for them. we talk about the individual mandate. you have to buy health care insurance or you get penalized? . what's the penalty? these numbers may surprise you. in year one it is 95 there's or 1% of your income.

that may be a lot or little depending on how you look at it. look at how the numbers go up. 2 1/2% of your income or $695 which whichever is greater. there is a lot to digest and we will have more details in the days to come. >> sanjay, thank you. you can get more on the effects of the election this weekend. sanjay gupta in his show at 4:30 eastern on saturday and 7:30 a.m. sunday morning eastern time. four years ago the tea a party gaining attention and fast forward to 2012 and passion turned to problems. the tea party seems to have lost momentum. we will look at what is ahead for the tea party. the u.n. is calling for a global day of action for this brave young girl targeted and shot b the taliban all because she wanted to get an education. we will tell you what this means for malala yousufzai. [ male announcer ] imagine facing the day

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after looking at all of those long lines this past election day, you would think that more and more americans were interested in voting for president this year, but it turns out that's not entirely the case. in fact, americans across most of the country showed up in smaller number than they did, not only in 2008 but in 2004. look at the breakdown with me. you can see this year the number was 57.5% of eligible voters. they are the ones who cast a ballot. that compares to 62.3 in 2008. obama beat mccain and four years prior, a little over 60% of eligible voters participated in the bush versus kerry matchup. in the battleground states it was a different story. 60% of voters showed up and that's where the election was won and lost this year. so republican party, speaker john boehner himself said today i had a difficult year. who's to blame for the loss from this past tuesday?

according to one tea party leader it is the establishment members of the party. kelly carender told cnn, in a nutshell the republicans sat on their hands for four years 'and i don't know what the republicans were doing. the tea party was just getting started. but as cnn's gary tuchman is about to show us us the tea party has a lot to answer for, as well. >> reporter: this is not the scene most supporters of the tea party envisioned or desired. president obama was supposed to be a one-term president. ♪ liberty yes, obama care no! >> a primary mission of the tea party, get the government out of people's lives. there was even an african-american-led chapter in l.a. complete with a sign at one rally that read tea supports mlk's dream. >> i see that fk fk likes obama care and we don't like obama

care. doesn't that tell you something? >> there was a lot of pa passion but problems. christine o'donnell running for senate in delaware. years earlier she told bill maher she dabbled in witchcraft. she had this ad. >> i'm not a witch. >> they say it is a sign of the problems they would have with untested candidates. many other notable tea partiers in the limelight that year. sharon engel was tripped when she said this to a group of teenagers. >> i don't know that all of you are latino. some of you look a little more asian to me. i don't know that. >> at the tea party increased its influence, speculation released that sarah palin run for president. >> the moment of outrage came with the passage of obama care. >> she decided not to run in 2012 but friend of the tea party

did. i caught up with bachmann at the minnesota state fair in 2010. she was running for re-election for congress and at the height of her influence. >> i don't take any election for granted. so thank you. >> in 2012 not only did her support drop quickly in the presidential race she barely won her congressional race this week and worse for two with other favorites, todd aiken lost his race in missouri his effort not helped by this comment. >> it is a legitimate rain the female body has ways to shut the whole thing down. >> even when life begins in the horrible situation of rain, it is something that god intended to happen. >> the tea party's anti-government message continues to resonate with many. but arguably the group's policy and miscues may have cost the gop a chance to be the party in the senate. they put together a video of what they expected to see this

week. >> tea party.net is evolutionizing the moment. they think it is over. won't it be fun to see their faces on november 6th? >> as it turns out for them, it wasn't a lot of fun. gary tuchman, cnn, atlanta. >> may not seem like it but we have to start to talk about black friday because shopping is around the corner, and this year one store will let you get your hands on big-time discounts earlier than ever. black friday prices on sunday next. and the candidate's speechs in pieces all over the district. the writer's desktop and the coordinator's phone are working on a joke with local color. the secure cloud just received a revised intro from the strategist's tablet. and while i make my way into the venue, the candidate will be rehearsing off of his phone. [ candidate ] and thanks to every young face i see out there. [ woman ] his phone is one of his biggest supporters. [ female announcer ] with cisco at the center... working together has never worked so well. campbell's has 24 new soups

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former syracuse assistant basketball coach bernie fine will not face federal criminal charges. he was the subject of the year-long investigation after several ball boys accused him of moll lesting them. prosecutors say they don't have enough evidence to bring him to trial. the sate it could not file charges because the statute of limitations passed. fine was fired but he maintains the allegations are patently false. americans voted on election day and now they want their elected leaders to get to work. as we saw throughout the past

campaign, fixing the economy was issue number one for americans. the campaign is over. you want action. tom foreman has the story. >> reporter: just an hour outside of d.c., people in the small town of washington, virginia, spent months waiting to see what the election would bring their way. and manying like cabinet maker peter kramer, say they didn't much care about whether the democrats or republicans would win, just as long as the creeping economy starts racing again. >> i'm saying it is both of those people's faults and yes, somebody fix it. let's get some people in washington that want to sit there and say let's solve the problem and stop the gridlock. >> reporter: next door at the stonyman farm ear's cafe, susan felt much the same way. >> certainly the economy has changed the way we conduct business and changed decisions we have made. major studyings. >> reporter: instead of expanding her family-owned

business she kept a close eye on costs, steered clear of debt and watched the electoral process play out. what is it that you most want to see from washington, d.c.? >> leadership and stepping up. the game of passing the buck, blaming the other guy, it sounds as if the way my brother and i used to fight when we were 7 years old and people know it. we don't want that. >> reporter: it was that way all over town before the election. many, like jewelry maker katlin mullin, were unsure of what would happen with taxes, jobs. >> i think a lot of people are scared to commit a large amount of money to anything, whether it be a couple hundred dollars for custom jewelry or a home. a lot of people are nervous. >> reporter: no one expects any quick fix for the economy. >> it's big and it's going to take some time and a lot of work and it would be nice to get at it. >> reporter: they are more than ready to start building up

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breaking news coming in regarding the chief of the cia. general david piskura, we are

learning he has resigned. let me check my notes here. he resigned, submitted his resignation to president obama citing personal reasons. this is according to to a u.s. government source. we have suzanne kelly reporting on it. she is our intelligence correspondent in washington. what do you know? >> literally this just come in within the last few minutes. we are finding out more details now. i am looking a statement i just got two seconds ago. general petraeus is resigning from his post. the reason an extramarital affair he's had. he started as the director of the cia in september of last year and something like this is sort of a bombshell days after the election. let me read to you briefly what i have gotten. this is a statement from the cia, i went to the white house, this general petraeus. i went to the president and asked to resign as director the cia. after married 37 years i showed

extremely poor judgment in engaging in an extramarital affair. he confirmed he will be stepping down from his post as the director of the cia. >> i am trying to understand. so she is married to his wife 37 years. he stepped out in his marriage. he's coming clean with it, talking to the president about it. why then does that mean he needs to leave his post as chief of the cia? >> that's a great question. as i'm listening to you here i'm reading through the statement. that's how quickly this has come out. it doesn't give a lot of reason. people that know him and worked with him over the course of his military career know he is a man of honor and integrity. i would be speculating if i said that's the reason. however, working here in washington, the honest truth is people having affairs is not always a career breaker. who knows what more is behind this. it would be tough to speculate on this but what we know is he has admitted to having an extra marital affair and he will be stepping down as the director of the cia. >> and he's barely been in this position, it hasn't been that

long, am i wrong. >> you are right. it has only ban little over a year. he was sworn in on september 6th, 2011. it's been an interesting an interesting leadership over there. he has a style that is very much from a military background. insiders at the agency have said, you know, that sometimes there are personality clashes between he and deputy director michael morale. sometimes they see things differently. but that doesn't rise to a reason for anybody to step down. he was never really embraced by the intelligence community in the way that leon panetta and george tenet was in terms of their style and approach. but again, you can they if you want to say it but it is certainly not a reason that anyone would step down from their post. >> top of the hour. stay with me. to let you know what we are learning here, this news just in from washington.

cia director david piskura etraeus submitted his resignation. apparently he stepped out on his wife. i showed poor judgment by engaging in an extramarital affair. such behavior is unacceptable as a husband and as a leader in an organization such as ours. this morning the president graciously accepted my resignation. let's go to the pentagon for reaction. chris lawrence what what can you

tell me about this. >> people are shocked and surprised. really couldn't believe it when they heard the news. you know, daivd petraeus has been married to his wife holly almost since he graduated from west point so many years ago. they have two years ago. holly has been an outspokened a ve kate for the troops. she sort of waded in to political waters at times on behalf of the troops. president obama invoked her name where richard cordray when his nomination held up by members of congress he invoked holly's name and cited her saying she's been working to make sure our armed forces personnel aren't taken advantage of. in fact, when daivd petraeus returned from iraq four years ago, he said, he called holly the greatest source of support, wise council and love that any soldier could have. it seemed to be a rock-solid

marriage to everyone who saw it from afar. >> apparently not. chris lawrence, do me a favor. stand by. we have suzanne kelly standing by who broke the news. wolf blitzer, let me bring you in. i'm sure you have spoken to general petraeus and know his wife holly. chris lawrence said people at d.o.d. are totally surprised. why, if you are having an afair, granted it is wrong but why does it mean you lose your job? >> when you are the head of the cia, that potentially compromise the director of the cia and it's an obviously very -- if you are hiding something like that, and you are not only have classified information but you are not only top secret but you are at the top of the pins kl in the intelligence community. that's an area potentially of vulnerability and it sends a serious message down the chain of command when you are talking to intelligence officers at the cia or other agencies of the u.s. government. one of the things we are always

warning you, don't get involved in extra a marital affairs because you noe don't know who the man or woman might be and they could be agents for hostile power or whatever, someone trying to entrap you. they called it a honey trap in the old days in the espionage novels and all of that. it is a serious issue in the intelligence community. it is a serious i issue any place but especially in the intelligence community and i assume, i don't know in for a fact, i assume it was probably going to come out and he decided i will resign and take the hit. it's time to move on. if somebody else was going to report it, some tabloid or whatever, that he decided to the move on and get it over with and move on. it is obviously a very sad moment given his distinguished military career. one of the most brilliant generals by all accounts we have had over the years. a phd, graduate of princeton university.

somebody not only a general but a scholar who knows his stuff and by all accounts doing an excellent job at the cia. so it is a sad moment not only for him and his family but for everyone who knows him and for the country right now. it is a baduation all around. comes in at an embarrassing moment for the administration toub sure, as well. >> highly decorated general. glancing back over here at this letter he apparently wrote. and with we now know the president accepted his resignation today. i want to read another part of the letter from general petraeus. it talks about teddy roosevelt. the opportunity to work hard at work worth doing. i will always treasure my opportunity to do have done that with you and regret the circumstances that brought that work with you to an end. wolf, stand by. suzanne kelly. talk to me about the timing of this. wolf sort of thought he was trying to get ahead that this would ultimately come out and

general petraeus wanted to go to the white house and submit his resignation. it was accepted. what do you know about the timing. >> wolf brought up the point, that engaging in something like this gives people something over you and that may have been a factor. there are more questions to be answered. days after the election. obviously the affair didn't happen in the last two with days probably had been going on before. was he asked not to release the information until after the election? or did he not tell the white house about this? i think there are more questions that have to be answered over the timing of it. >> wolf blitzer, are you still with me? >> yes i am. >> now we know the president accepted the resignation, what happens next. >> the president will have to place someone. and they will be confirmed by the intelligence committee and the full senate i'm sure they

are thinking of potential candidates to replace general petraeus. but the cia will go on. the national intelligence community will go on. the country will go on. these kinds of things happen. it is obviously a major set back. it's a horrible situation. especially for general petraeus and his family to end what has been such a remarkable career on such a horrible note, a sad note for him and his family and indeed for the country. you are right, brooke, i have known him many years and covered him. spent quality time with anymore iraq when i was there in 2005 and baghdad and fallujah but he did a brilliant job on the battlefield and worked his way up a. he made a mistake and if you read what he says in this letter, he says, just read the first paragraph for viewers, brooke, who may just be tuning in. he says it here.

he says yesterday afternoon i went to the white house and asked the president to be allowed for personal reasons to resign from my position as the director of the cia after being married for over 37 years i showed extremely poor judgment in engaging in an extramarital affair a. such behavior is unacceptable both as a husband and as the leader of an organization such as ours. this president graciously accepted my resignation this afternoon. as i said, other intelligence officers, if their bosses find out about inappropriate extramarital affairs or whatever going on, that could be a career ender in that kind of work. if you are a clandestine officer for the cia and your superiors find out you have engaged in that kind of behavior, potentially endangering the the security of the united states that is a career ender right there. i guess he realized if he had

been a lower level cia officer he would have had to resign and he's the director. so he made that decision and he decided to resign. we don't know if this information was going to come out. there's more that needs to be learned. i'm sure the next few hours and days we will learn more. i want to underscore how sadded this is for the u.s. military, the army, the cia, indeed the country that someone of this stature must end their career under these circumstances. >> absolutely. wolf blitzer, i think you bring up a great point. people wondering why this would happen. some of this information, at the top of the food chain and because of this extramarital affair some of that could be compromised. therefore he is stepping douchbl wolf, thank you. suzanne kelly, thank you. chris lawrence, thank you. again, we are learning the president of the united states has accepted the resignation of the chief of the cia, general petraeus. so they will have to then find someone else to fill his shoes. cnn newsroom, back in a moment.

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we want to keep the conversation going as we are just learning here at cnn that the head of the cia, a retired four star general, general david petraeus is stepping down. the president accepted his resignation because he said he cheat on his wife of 37 years, holly. he said because of that he is stepping down. we have a couple of people to talk to. suzanne kelly is with us from washington. intelligence correspondent and barbara starr at the pentagon. a lot of angles to get to. bob, let me begin with you. first of all, are you surprised that this man is sending his

resignation to the president because of cheating on his wife? what do you make of that in. >> i'm surprised of two things. i was hearing rumors he was going to leave over benghazi that cia was going to take the fall for that fight down there and he was supposed to go to princeton, as i understood, as president. secondly, i'm surprised is cia directors rarely leave under a marital scandal like this. it just doesn't happen. the scandals like this do happen at the cia but they are kept quiet. people leave for family reasons or whatever to move on. i'm completely surprised this -- the whole thing is -- there's a big story behind it. >> okay. you sound perplexed. you sound like there could be more there but we don't yet yet as the fewee details are eking out. if you were surprised he would be stepping down because of simply an extramarital affair. wolf blitzer brought up the

point whoever he is having an extra marital affair with the top secret information could be compromised do you buy that as an explanation? >> i think it is going to -- i think we are going to see. it will appear as probably an affair with a subordinate. that's pure speculation. at the cia, or any federal agency it can't be done. you have to leave. especially when it is about to become public. that he was caught red handed if you like on this whole thing. i think -- my speculation is that is what we will see. >> again, speculation we don't know. let me ask you this, general petraeus has not been at the helm of the cia for very long, just about a year. you are former cia and talk to people currently. what kind of mark will he be leaving on this group? >> he still hadn't found his way at the cia.

of course as a four star he wasn't used to a civilian organization. he brought a lot of aides with him. he was a bit isolated. he was just learning his way. you know, he didn't have a time to really change anything at all. that's what makes it even more surprising that he is leaving so soon. >> what about the cia in general? here their chief is leaving. how do they progress? is this a big hit for them? >> it is a huge hit. the cia needs a director who should be in there for four or five years, understands the way things work. put his people in to key positions. figure out what intelligence is about. it needs continuity. it cannot be, you know, switching directors in and out all the time. especially highly plil politicized directors or four star generals. it is a professional organization and needs to do things in the quiet.

so petraeus leaving a this point is not helpful at all. >> bob baer, former cia operative, cnn contributor thank you for picking up the phone. you say there is more to the story and perhaps that will eke out in the coming days. bob, thank you. we have barbara starr at the pentagon, suzanne kelly at the pentagon and a bunch of questions for them. let's take a quick break and we will talk on the other side of the break. [ male announcer ] alka-seltzer plus presents the cold truth. i have a cold... i took dayquil, but i still have a runny nose. [ male announcer ] truth is, dayquil doesn't work on runny noses. what? [ male announcer ] it doesn't have an antihistamine.

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breaking news. retired four star general david petraeus stepping down. the president accepting his resignation. general petraeus citing an extramarital affair. he's been married for 37 years and says he needs to step down from this post because of this affair. again, this just coming out. details will be eking out the next couple of days. let me read you the first paragraph. yesterday afternoon i went to the white house and asked the president to be aloud, for personal reasons, to resign from my position as director of the cia. after being married for over 37 years, i showed extremely poor judgment in engaging in an

extramarital affair. such behavior is unacceptable both as a husband and as a leader of an organization such as ours. this afternoon, the president graciously accepted my resignation. i have barbara starr at the pentagon and suzanne kelly standing by in washington. i understand you have something from the white house? >> brooke, we now have the statement from president obama on the resignation from general prk. we literally just got it. david petraeus provided extraordinary service to the united states for decades by my measure he was one of the outstanding generals of our generation leading our men and women through a remarkable period of service in iraq and afghanistan where he helped the nation put the wars on a path to a spochbsable end. as the dredger of the kri cia he has continued to serve with characteristic, intellectual rigger, dedication and patriotism. by any measure he has made our country safer and stronger. it's only a two-paragraph

statement. here is the last paragraph. today i accepted his resignation as the director of the central intelligence agency and i'm confident the cia will thrive and carry out its mission and i have the upmost confidence in the aekting director and the men and women of the cia. my thoughts and prayers are with david and holly petraeus who has done so work to help families through her own work and wish them the best during this difficult time. there will be some consistency obviously at the cia through this. there have been some five different directors in eight years who have headed the agency and the president himself pointed out deputy director who was a career intelligence professional with 32 years at the agency. >> i have to ask about the timing. we learned today that -- i'm glancing at my notes because it is next week that senior intelligence, state department officials are to be grilled next week, specifically on what

happened in benghazi on september 11th in front of the senate intelligence committee. it with was supposed to be cia chief, now i should say former chief david petraeus. now what? >> now michael morale will get the fun job and benghazi you know how political it has been. that is not really expected to go away. i think republicans are extremely angry and feel the administration knew more than it did in the days the attack and it didn't come forth with transparency in what it knew and the administration has fought back hard against that accusation. there were some grumblings about petraeus went to the hill and testified in closed hearing shortly after the attack and briefed members about what the intelligence committee knew. there were some grumblings that me and my colleagues at cnn were hearing. they were disappointed in the information that petraeus had given them. i don't think they needed so much of a fall guy in the

benghazi effort having won the election. >> okay. suzanne kelly, you are getting more information. i will ask you to stand by and as soon as we get more we will come back to you. barbara starr, let me go to you. i was talking to bob baer and asking how much of a hit it would be on the cia and he said it would be a huge hit and that general petraeus didn't really leave a mark. he was finding his footing, i believe was his phrase at the civilian group. in terms of the military, i mean this is a retired four star general. i presume you have been in afghanistan with him, spoken to him. it's a huge issue with the military. >> well, you know, it really is, brooke. i've interviewed him many times in iraq and afghanistan and traveled with him in those areas. the thing about dave pe trace you have to remember is he was and is always what you just said, the four star general. four star generals live

potentially -- and it's risky for them, they lead isolated lives, don't they? they have aides. they have people around them. a small group of confidants. they have access to the highest level of intelligence and in the ultimate inner circle. we have seen it time and again. think back to general mcchrystal making some judgment calls that didn't work out for him. him having to leave oddly enough, petraeus taking over from him and this has happened time and again for four star generals for a variety of reasons. you know, there had been a lot of rumor around town in recent weeks that reporters were working on profiles of petraeus that were not going to be complimentary. so perhaps, we don't know, but perhaps word of this was beginning to circulate around town. i want to shift for a minute to mrs. holly petraeus. >> i wanted to ask. i'm sure you have met her. >> i know her. i have spoken to her many times. i think it is important at the moment to remember there is a

family involved here. first of all, they have a son who has served in the army in southern afghanistan in some of the roughest neighborhoods of that war zone. mrs. petraeus, holly petraeus, she's really come in to her own in recent years. she's an expert in consumer finance protection issues for military families. i've talked to her about that. she knows her stuff. i can tell you one time i was at an event where both he and she were there and he basically said, talk to my wife. she knows her business. he really was so proud -- is so proud of what she has accomplished. they met each other, you know, back at west point. her father was superintendent of the academy when he was a cadet at west point. so essentially you could think of it as he married the boss's daughter and this woman spent 37 years as a military wife essentially. many, many years in which her husband, the father of her

children was not home, was in iraq, afghanistan, other war zones. she more than anybody knows what young military wives are going through these days with long separations, trying to raise the kids, trying to keep the families together while their husbands are off doing other things. so this will be looked at through many prisms, but it will be looked at through that military prism. i think that still so many people will view him always as the four star general. >> i'm so glad you mentioned the wife and the son because clearly this not only has ripple effects in the military, and the cia but within a family, as well. barbara starr, thank you, at in the pentagon. director of the cia, general petraeus is out. we'll be right back. up. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know.

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. this is cnn breaking news.

>> breaking news here on cnn. i'm brooke baldwin. let me get you up to speed in case you are just tuning in. we have learned the cia director, general petraeus retired four star general is now stepping down. president obama today accepting his resignation. the general citing an extramarital affair. he has been married to his wife holly for some 37 years, but he says because he has stepped out, he is stepping down. a little bit of color. we have gotten from barbara starr at the pentagon. not only does it have a huge hit on the cia as they move forward it is rippling within his family as well, not only the wife, holly but his son that served our country and in the toughest neighborhoods in afghanistan to quote our correspondent in the pentagon. this couple go all the way back to when general petraeus was cadet petraeus and he met holly because her dad was the superintendent of the school.

so goes a long way back. now we want to bring you up to speed with suzanne kelly and jess ka yellin, our chief white house correspondent. let's go to you. the president is reacting, citing general petraeus' extraordinary service. >> hi, brooke. that's right. he's said not only has he served extraordinarily, performed an extraordinary service to the u.s., jay carney said he has done remarkable work in his role at the cia. the president making clear that the next acting deputy director will be mike morrel. i would.out that general petraeus an the president had at times a tricky relationship, but they have become closer partners in recent months. and this comes at an awkward time. the president and general petraeus now dealing with the fallout from the death in

benghazi in of ambassador chris stevens. the white house and the cia now both trading responsibility over who made the call for the eck plan nation in the days after as to why exactly it was described the way it was described. and the cia finally coming out, it would seem and taking some of the responsibility. it would seem, in the most recent days. now, with this development, general petraeus' departure, there will be questions of how this impacts the investigation. the white house insisting they are going ahead with this investigation as they have been all along. and obviously this has nothing to do with that libya incident with the deaths in libya. there will be some political sensitivities around it no doubt, brooke. >> jessica, let me ask you, you

have interviewed holly petraeus because as barbara pointed out she led the consumer financial protection bureau's office specifically for service members affairs. tell me about her role there. who she is. >> i spoke to her when she served with elizabeth warren, who's now senator elect elizabeth warren for massachusetts, but at the time she was setting up what is now the consumer financial protection bureau and she brought in holly petraeus to represent the interest of service members. she is still there, working to represent. so if you are in the armed services and you are overseas and suddenly the bank is foreclosuring on your house and the mortgage gone awry, and you are somewhere deployed overseas and have no way to sort of respond and deal with it, you contact holly petraeus' office and they help you find remedies so you don't come home and find you have no house, and that's what she is there trying to help

fight on behalf of the families of deployed men and women. and she's been doing wonderful work. she was lovely soft-spoken woman. did not like the spotlight and did not want to be interviewed on television but warm, friendly woman. >> jessica yellin at the white house, thank you. as we are playing this video it is holly petraeus in the light pink blazer standing behind her husband. just to put a face on who this woman is who's been married to this retired four star general for 37 years. >> go for it, jessica. are you still with me? >> yes. >> i hear you. >> the president actually met with general petraeus yesterday and the general offered his resignation and explained the reasons behind it and the president then accepted his resignation in a phone call this afternoon. >> okay. in a phone call this afternoon. so, yes, that jives with this

letter we have been reading from general petraeus this afternoon. he said the president graciously accepted my resignation. jessica yellin, thank you. we will have more on the story and we will talk to suzanne kelly for a couple more questions. again, david, general petraeus stepping down as the chief of the cia.

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i want you to know before we talk economy again we are working a breaking news story the head of the cia general petraeus has now resigned. the president just this afternoon over a phone call accepted his resignation. we will push the foyer story forward in a moment but first the other big story of the day, our nation's speeding toward what is known as a fiscal cliff. the nasty combination of steep tax hikes and budget cuts that could affect om almost all of us in a matter of weeks. now the election is over, it's time for washington to get in gear and do something about it.

you can bet there's plenty going on behind the scenes. president obama is inviting the top leaders of both houses of congress and both political parties to meet with him at the white house next friday. senators harry reid, mitch mcconnell, and speaker boehner and congresswoman nancy pelosi will be there. this afternoon, we heard the president say just about two hours ago, that he is open to compromise. he's open to new ideas received by a standing ovation walking in the room there. there is one point the president is sticking to. higher taxes for people making higher incomes. >> i refuse to accept any approach that isn't balanced. i'm not going to ask student and seniors and middle-class families to pay down the entire deficit while people like me making over $250,000 aren't asked to pay a dime more in taxes. >> just about two hours before we saw the president, we saw this man, republican house

speaker john boehner, he said, quote, everything on the revenue side and the spending side has to be looked at, end quote. when it comes to specifics, speaker boehner put the ball firmly in the president's court. >> i don't want to box myself in. i don't want to box anyone else in. i think it is important for us to come to an agremt with the president, but this is his opportunity lead. >> exactly what does all of this mean for you and for me if washington does not get anything done in the next 52 days? what if we do over this proverbial fiscal cliff? according to the tax policy center, taxes would go up an average of $2,000 for middle-income american households. jill schlessinger is editor at large for moneywatch.com. jill, welcome back. how many of us will see our taxes go up, if there is no deal? >> this is unbelievable. actually 80 to 90% of us will see some tax increase whether

that comes from the payroll tack, the expiration of a tax credit that obama had enacted. this is widespread. as a result, you would like to think that all parties would like to get together and make something happen, but today's talk was really about you first, you go first. i will wait until you say something, right? at least we know they are meeting next friday and hopefully they inch toward a compromise. it's a word for today. the president says he is open to new ideas. isn't entirely wedded to his plan. and one idea that seems to be bubbling to the surface is raising revenue by changing the tax code, closing the loophole and deductions rather than raising rate on the wealthy. could i still end up paying more if they do that. >> yes, you could. >> okay. >> let's talk about this for a second. the tax rate is this easy identifiable moment. for every dollar over $380,000 instead of paying 35% taxes you

will pay 39.6%. that is very clear. what if i bring new money to the government by doing this. hey, you know the mortgage interest deduction that you rich people claim and the charitable deductions? i'm going to limit how much of that you can take. effectively it has the same impact. you will pay more in tacks. i haven't raised your rate. i have limited some of the deductions you are taking. when you hear the word loophole it is not illegal. we are talking about perfectly legal things in the tax code which both sides are now saying if we close the loophole the government will bring in more money but we can tell everybody in our district we did not raise taxes. it's similar man ticks. it is lil by hu but has the right effect if we can get the deal done. >> another way for the government to get money. let me throw this wacky idea at you. ali velshi said this is crazy. i was reading in the "new york times" op-ed section this

morning and paul krugman wrote if we go over the fiscal cliff no big deal. the president shouldn't be held held hostage by the republicans. the fiscal cliff isn't a cliff. it is not like the debt ceiling confrontation where terrible things might have happened if the deadline had been missed. he fwoez on this time nothing very bad will happen to the economy if agreement isn't reached until a few weeks or few months in to 20 13 so there is time to bargain. what do you think. >> i don't have a phd in economics and that makes me concerned. there's a problem. one issue which krugman is right about. going off the fiscal cliff does what a lot of people think needs to happen. it spreads pain across a variety of americans. we may dip in to a recession, but heck we sure do solve the debt crisis, don't we? that said it is pretty easy to be cavalier and say it is no big

deal. how do you feel if the dow goes down 2 thourk points in the interim or one of the people that loses a job because your company is freaking out over this debate going on and on and on. i don't think it is fair to say it is no big deal. it is a big deal. is it the end of the world? no. nothing is the end of the world on this stuff. it is money, it is painful. it will probably be banged out behind closed door. no one will look good in this. i will promise you that. everyone will look obstructionist. at the end of the day we want a way forward to get through the period so the economy improves slowly and we have a plan to deal with the debt. everyone wants a plan. we don't have to do it all at once. >> 52 days and counting. jill schlessinger we may have to have you back to assess. editor in large for cnnmoneywatch.com. and as promised we are staying on top of the breaking news story, general petraeus has

stepped down as the director of the cia and the president has accepted his resignation. we are getting more from the letter that the retired four star general sent to his former colleagues at the cia. suzanne kelly is on that next. [ "the odd couple" theme playing ] humans. even when we cross our "t"s and dot our "i"s, we still run into problems -- mainly other humans.

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this is cnn break news. >> i want to go straight to washington to suzanne kelly. our national intelligence correspondent who can shed a little light on the breaking story here this afternoon. the fact we are learning the president has accepted the resignation of former chief of the cia general prk. we are hearing from the general in his own words in a letter to his colleagues. >> if you can't talk to the man himself and ask the questions everyone has for today you can glean what he is thinking and feeling to the letter issued to the employees of the cia an hour

ago, brooke. here's what it says. after being married over 37 years i showed poor judgment in engaging in an extra marital affair. such behavior is unacceptable as a husband and as a leader of an organization ours. there's another little nugget where he quotes teddy roosevelt saying life's greatest gift is the opportunity to work hard at work that's worth doing. this is what he said to his employees. i will always treasure my opportunity to have tupb that for you and i will always regret the circumstances that brought that work with you to an end. there are a lot of unanswered questions and a lot of things reporters will be digging into. why now? why is this something that came out right now within days after the election? did somebody have this information on them they were waiting to release? why publicly humiliate your family? is it a way of being honest. a lot of questions will need to be answered in the next few days. >> suzanne, as soon as you get

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♪ ♪ now! now! now! >> the anger is bubbling. this is oceanside, new york just a couple hours ago.

look at the crowds. people furious with the utility company. as of today, more than 200,000 are still without power in just this one community. folks, this is 12 days since the superstorm sandy swept through here. 12 days without heat with temperatures dipping into the 30s last night. lack of power not confined to long island. listen as new york governor andrew cuomo blasts utility companies across the region. >> you pay a person for service. they were specialized in doing this. and we paid them and gave them a franchise because they represented themselves as experts at doing this, and they failed. and they should be held accountable for their failure. >> and consider this today new jersey's attorney announced lawsuits against eight businesses accused of post-sandy gouging. that may be just the beginning of this story line. consumers filed more than 1,200

complaints against gas stations, hardware stores and hotels. closing bell moments away. market check next. [ male announcer ] if you're eligible for medicare,

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and find the aarp medicare supplement plan that may be right for you. days after a the election, days before the hearings on capitol hill in which many senior intelligence leaders were to be grilled by congress on what happened in benghazi, we are now learning this retired four star general david petraeus has now stepped down from his post as the director of the cia. the president accepting his resignation just this afternoon. we'll have much more on that so stay right here. but i want to talk about the markets. closing bell just about two minutes away here. let's go to allison. as we're looking at this, down just barely here. but today huge day on the economy. we're hearing from speaker boehner, we're hearing from the president. tell me more about how markets are reacting. >> first of all, you look at how the markets are doing, they are

pretty flat. triple digit plunge made any real gains that we saw in the market today they fizzled out, brooke, right after president obama's speech. the dow up more than 70 points before we spoke to the nation about the looming fiscal cliff. and you saw the gains slowly but surely disappear. didn't deliver anything new. that's how the market sees it. more of a call to action. investors are nervous and they're showing it. look how the dow did the past couple of days. two days, between wednesday and thursday, it fell 430 points. more than 430 points. as you can see, it's wavering all day today. you know, investors, they have been moving money into bonds. that's a safer investment. they don't feel like they want to leave their money and stocks. it's a clear sign that wall street wants to hear more and wants more clarity on the fiscal cliff. brooke, with no end in sight, it is fear that's crippling wall street. so we're seeing sort